Washington DC Real Estate Investment Training
Denyese and Damian
Capital Deals in the Capital City
August 13, 2007 Day One
9:30 Damian and Denyese arrived at the hotel. We spent the first couple of hours reviewing their homework and what they had accomplished before my arrival. Damian had done some extensive work in already interviewing five hard money lenders and found several that were not FICO driven and purely based their loans on the properties themselves. Neither of them though had contacted any realtors, mortgage brokers, or title companies, so we worked until 12 noon making phone calls to set up appointments later in the week.
12:00 After setting up appointments with potential team members, we focused on reviewing the published trustee sales that were being held daily in the surrounding counties. We were able to access the property listings via the trustee’s websites and we discussed how they could utilize these lists on a weekly basis to solidify their marketing campaigns instead of using Foreclosures.com or Foreclosure Listing Service. We identified several auctions taking place this week and chose to attend one Tuesday morning.
2:00 We arrived at the local county clerk’s office to help us pull preliminary title reports and to also investigate and find home owner information on specific foreclosures that they were both interested in. One of the clerks took the time to inform us that we would only be able to pull Maryland information from the Clerk’s office, where Virginia would allow you to pull info online. Denyese and Damian both had several questions regarding financing these purchases and how they would be able to obtain, assign, and or afford these potential deals. We discussed several options and I outlined the different methods for them.
3:00 We headed back to the hotel and I helped them create several online adds (Craigslist) to help them attract wholesalers and a buyers list so that they would be able sell properties quickly. We spent a few minutes calculating their Maximum Allowable Offers, and what they should look for to make on assignment fees depending on the numbers. Damian also wanted to discuss a FSBO that was in his neighborhood and how he could help the home owner sell the property with owner financing. We discussed several options and calculated them dependent on what the homeowner would need.
4:00 I shared with Denyese and Damian the Four and Five Goal Closes. Since they are on the border of two states, they would need to know both. We spent at least an hour roll-playing and I had each of them practice closing each other. Both of them struggled initially at first, but both caught on quite well.
After roll-playing, Denyese and Damian wanted to show me several vacant commercial properties in the area that they were interested in. We left the hotel and spent the rest of the day looking at those properties. We were able to track down the owner’s information, along with the specific contractor info via the attached expired permits. We knocked on several of the home owners around these properties to see if they could shed any light on the status of and the condition of what the owners were planning for the properties.
7:00 We ended the day back at the hotel by going over the following day, and by also answering four reply’s to the Craigslist adds that we had posted earlier in the day.
August 14, 2007 Day Two
9:30 Damian and Denyese arrived at the hotel and we began the day by discussing the concerns from the day before. We then reviewed the appointments and schedule for the day ahead. We headed out to the foreclosure auction scheduled at 10:30 in Prince George County, MD.
10:30 We arrived at the foreclosure auction and discussed what was going on. I had both Denyese and Damian meet and visit with several other investors and rehabbers present at the auction. We were fortunate to find several of them looking for wholesale deals. The auction went on for 90 minutes and we took off to meet Denyse’s realtor friend, Andrea.
1:00 We met Andrea, a realtor with Keller Williams, for lunch at Union Station. Andrea was a part time realtor who worked full time as a social worker for the government. We talked with her for a while and she informed us that wasn’t that familiar with short sales and owner financing. She brought up that she had a client who was in trouble. We constructed several viable options for her friend, but Andrea kept shooting them down to her not being willing to discuss them with her client, and that she wouldn’t want to go down that road.
2:00 We left the meeting with Andrea and Denyese mentioned immediately that Andrea was not the kind of realtor that she was looking for. She stated that the meeting later that night with Gary Walker, Realtor, would probably be more in line with what she would be looking for. We headed back to the hotel and started making some phone calls to the owners of the commercial buildings that we had looked at the day before. We found out immediately from our phone calls to the contractors and owners that many of the properties were tied up waiting on the city to complete the approval process for rezoning the properties. The owners were not looking to sell. We also made some phone calls to the owners in a ½ block area in DC that Denyese had her eye upon. We were able to visit with four of the ten property owners, and they were all willing to talk about selling. I was able to get Denyese to get the price lowered on one property from an initial amount of $500K down to $375K by simply asking if that was the best that he could do. Denyese was overjoyed at the success.
3:30 We spent the next two hour working on pulling preliminary title information to give us an idea of what was financed and if there were any outstanding judgments against the properties. I also showed Damian and Denyese how to utilize the online search engines for the cities and counties in and around their areas to access tax, property values, and property sales to allow them to make as accurate an assumption as possible. Damian was able to find a listing for a short sale property amongst some Craigslist ads, so we were able to pull the information from the online searches and contacted the realtor to find some other information. The realtor was not that helpful and seemed rushed and unwilling to help us out as she stated that she would call us back in a couple of days. With this property, we were able to find out that recently defunct Aegis Mortgage was the holder of the note. I was able to show both of them how to contact the REO department to get some more information. The REO dept. took our info and promised to email us the more specific data on the property. I also called Aegis’ corporate office and was able to get a hold of Kim Koras who handled their warehouse lines and bad debt. Kim was nice to talk to, and she didn’t know if she could send anything out immediately as Aegis had just filed bankruptcy and might not be able to send anything out until next week. She stated that she would at least get some clarity on it and contact us back with that info. We got off the phone and Damian and Denyese were both excited with the turn of events. We decided to head out to dinner early to look at a few other properties and to arrive at the restaurant in time to meet with Gary Walker.
6:30 We met with Gary Walker and we were all immediately impressed. He brought several short sales that he was working on and proposed working together on several others. It turned out that his company was targeting short sales with at least $100K in equity, but he was willing to send anything below that to Denyese. We had a great visit with Gary and he also was willing to give us his contact info for two title companies that understood investors and any contacts for rehabbers as well.
8:30 Dropped back off at the hotel
August 15, 2007 Day Three
9:30 Damian and Denyese arrived at the hotel and we went over the schedule for the day and appointments. Damian and Denyese also wanted to go over some ways that they could streamline their business and help them out with the fact that they would also be working full-time jobs still. I recommended them utilizing Pfax accounts to help them receive faxes promptly and to utilize several of the available mailer companies such as Postcard Mania to help them send out foreclosure and pre foreclosure postcards. I also recommended that they start using road signs to help motivated sellers find them. We also replied to several more of the wholesalers who had contacted them from their Craigslist ads.
11:00 Damian and Denyese also had several questions about approaching builders and offering owner financing to them to help them sell their properties quicker. We also discussed talking with realtors about this to help them close more deals. We utilized some of the letters from Bob and Jayme’s Paper Power and Financial Mastery boot camps to help them customize letters that they could send out to Sob’s, expired listings, builders, etc. I also had Damian and Denyese work on structuring several note deals and had them work out the numbers themselves that way they would be more familiar in explaining the numbers themselves. We headed out to meet with a realtor that Damian had contacted the Saturday before, Bert Lassiter.
1:00 Lunch with Bert Lassiter. Bert has been a realtor for about two years, and he brought his broker, Craig James, with him. Bert had not worked much in the short sale industry or with investors, but was looking to break into the market. His broker was an investor and was willing to help Bert in helping us. Bert promised to go home and pull some expired listings for us and along with listings that were over 180 Days. He also had several recommendations on title companies and mortgage brokers for us to look over. We thanked Bert and Craig for their time and headed back to the office.
3:00 We spent the rest of the afternoon driving around and looking at ugly properties. We also knocked on several doors of homes going to foreclosure and were unable to be able to speak to the owners. We were fortunate to speak to several neighbors of the properties who told us that their neighbors had either moved out or were still living their. We left flyers at each door and headed back to the hotel to get ready for dinner.
6:00 Dinner at Smith & Kolinsky
August 16, 2007 Day Four
9:30 Day four started out with us reviewing the concerns from the day before and working on them to organize them selves. I also had them repost their Craigslist adds to update them. I also started to put together a hot sheet that outlined their teams (Realtors, Lenders, Hard Money, Title, etc).
11:00 Denyese received some comps on the Aegis REO property from Gary Walker, and we looked through them. We found an active listing that was listed as a short sale from the City of DC which included three properties, 30, 32, and 34 Q street. The property was abandoned and needed some serious work, but at an asking price of $400,000 with the potential for what looked like a condo conversion of 8-12 units, we decided to immediately drive out and look at the property. We called Gary back, and he told us that he would immediately pull the information on that property and contact the city. We headed out to look at the property.
12:00 We arrived at Q street and found the properties to be in pretty decent condition. We were unable to get inside the properties, but we inspected the front and back of the properties and we were able to talk with neighbors on the properties. The properties had been vacant for over a year, but were larger foot prints than the surrounding properties. We were all excited and we immediately called Gary to see about getting a contract together. We also called several of the surrounding properties to find out what they were going for. One property that had two, three-two-ones, were listing them at $450K and $570K and they had been on the market for over a year. This gave us a good price as far as ARV.
1:00 We headed to lunch and we spent the majority of lunch discussing financing options. We discussed financing it long term, along with hard money, and also at the possibility of her brining on a partner to split in the profits. Based on what the neighbors stated, we figured that you could comfortably convert 30 and 34 Q into four condos, and 32 Q into three or four condos depending on the floor plans.
2:30 We headed to Denyse’s place and started to work on a weekly and monthly marketing plan for both of them to keep busy. We also identified several networking groups for them both to attend. I also showed them both a couple of websites for them to pull absentee owners from and how they could possibly utilize, share, or sell this list of name to other investors. We also contacted Countrywide and First Magnus Mortgage companies to also see about getting a list of defaulted notes. We were able to get a hold of two account executives that would get us the contact info for the warehouse managers.
4:00 We spent the rest of the afternoon discussing any questions that they had. I went through a complete short sale package for them to review. They had a few questions, but felt pretty comfortable with everything. I had them complete the mentor evaluation and we called it a day.
7:00 Dropped back off at the hotel
The WashingtonDC area includes southern Virginia, northern Maryland, and the DC area itself. The area is compromised of several diverse areas with the DC area and the surrounding areas experiencing a lot of growth and residential and commercial growth. The foreclosure and lending laws in Maryland are different than the other two areas in that Maryland has passed several foreclosure laws that limit the amount of contact that an investor can have with a family going through foreclosure. There are a lot of condominiums being built around the Capital Hill and downtown DC area along with existing multiple level homes being rehabbed and converted into multi-family units as well. The medium home price ranges from a low-end of around $300K to $500K. The existing SFR market is somewhat stagnant with the increased amount of foreclosures and inventory available on the market. The average listed home is taking round six to nine months to sell. DC is also experiencing many areas of the town that were once considered in the “hood” have now regentrified into mixed commercial and residences with increased values, developments, and young to middle aged professionals moving into these areas near the subway and Capital Hill. These pockets do have quite a few investors taking advantage of these hot pockets, similar to what is going on in East Austin, TX. The county of Prince George, MD is also looking to develop several areas of the county near the capital into ArtDistricts with mixed use developments. There are a lot of REO properties on the market, and several of the realtors that we spoke with mentioned that the majority of lenders are still looking for full-priced offers at the foreclosure auctions and REO properties. Many of the investors that we spoke with at the foreclosure auctions are staying away from short sales in Maryland due to the increased regulation and using the fact that they can tie up a property at foreclosure for 10 days with 10% of what the opening bid the lender is requesting at auction. All in all, the area does have substantial pockets for profits from rehabs, foreclosures, commercial development, and regentrification areas.
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